Bank of England and FCA highlight collateral mobility as key tokenization benefit

The Bank of England and Financial Conduct Authority just told the world what the UK’s financial industry actually wants from tokenization. Their joint Feedback Statement, FS26/1, distills input from 123 industry stakeholders into a clear consensus: post-trade processes, particularly margin calls and liquidity management, represent the most compelling use case for tokenized assets in wholesale markets. The two regulators now plan to build a joint roadmap for tokenization by late 2026, covering issuance, settlement, and collateral treatment. What 123 respondents actually said Features like atomic settlement and round-the-clock trading were mentioned by respondents mainly in the context of how they improve collateral operations. Those capabilities matter because they make collateral move better, not because traders are desperate to execute gilt trades at 3 a.m. Research from UK Finance and Oliver Wyman referenced in the regulatory materials puts a number on the potential impact: tokenization could reduce excess collateral buffers by up to 30%. That’s capital currently sitting idle as a cushion against settlement delays and operational friction. The regulatory roadmap taking shape The ...